In the last two years, another phenomenon has been at play: Retail and institutional investors in search of yield are finding it in long-duration bonds in emerging markets denominated in local currencies, according to research compiled by UBS.

“This is something we’ve never seen before in the emerging world,” Jonathan Anderson, economist at UBS, told clients in a Sept. 15 research report.

Gaining Entry

One way retail investors gain access to these bonds is through a handful of specialized exchange-traded fundsthat have popped up in recent years, according to Morningstar.

One reason these bonds may continue to do well is that the global growth slowdown is taming inflation in hot emerging economies, leading central banks to curb interest rate hikes, says Leung at JPMorgan.

“If you are right thinking a central bank is close to finished with raising interest rates, it’s a great time to look at buying bonds,” he says.

Ted Wright, director of portfolio management at Genworth Financial Asset Management, has been investing in local currency bonds for his retail clients “to access countries that we think have higher growth potential than the U.S.”